New Delhi. People often look for shortcuts to get rich quick in the stock market. Some follow tips, some follow trends. But some people think completely different from the crowd. One of them is Sanjay Bakshi. Today he is counted among India’s most well-known value investors, but his beginning was something that few people would have expected. In the early 1990s, Bakshi worked part time at Burger King in London. While flipping burgers to make ends meet, he discovered the thing that changed the direction of his entire life, fat investing.
At that time he started reading the writings of Warren Buffett. He understood that the real victory in the market is not in buying cheap things, but in identifying strong companies. Such companies have a moat around them. This moat protects them from competitors and provides sustainable earnings in the long run.
What is big investing?
Fat investing is not a technical formula. It’s a simple idea, invest money in companies that are hard to beat.
Meaning
- whose brand is very strong
- Whose technology or product cannot be copied
- Whose distribution chain is so wide that it is difficult to make space for any new player.
- whose customers return again and again
- Whose leadership is reliable and steady
- Such companies may seem expensive, but they create wealth over the years without much ups and downs.
The journey from flipping burgers to becoming a ‘fat investor’
Sanjay Bakshi initially did what most value investors do, looking for cheap companies. But in 2012 he completely reset himself. Leaving aside cheap stocks, he started betting solely on Moat companies. This proved to be his biggest turning point.
He says that between 2001 and 2012, he earned about 24 percent annual return, but after adopting moat investing, this return reached about 45 percent annually. his thinking was simple
- If you find a good company, buy it even if the price is high.
- It is better to hold the business for the long haul rather than making repeated trades.
- Check the company’s moat, management and growth using the checklist
With this approach, he invested in quality companies like Ambika Cotton, Wonderla Holidays, Pidilite Industries and Relaxo Footwears.
ValueQuest and the investment philosophy that changed in crores
In 2014, Bakshi launched ValueQuest Capital along with Paresh Thakker. His first year itself was a blast, the fund gave returns of almost 69 percent, while the market was up only 17 percent at that time. Later, his India Moat Fund was also a great performer.
The most important thing is that the fund focuses on only 11 companies. Most of these are debt-free and provide profitable growth year after year. Global investors also appreciated this model. In 2018, Andrew Marks, son of Howard Marks of Oaktree Capital, bought a stake in ValueQuest, which is a big validation in itself.
